Indian Programs:

BIA's Management of the Wapato Irrigation Project

RCED-97-124: Published: May 28, 1997. Publicly Released: May 28, 1997.

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Pursuant to a legislative requirement, GAO reviewed the Bureau of Indian Affairs' (BIA) management of the Wapato Irrigation Project, focusing on: (1) the key reasons for the project's idle acreage and the steps that can be taken to return these lands to production; (2) the principal reasons why operation and maintenance assessments for the project are past due; and (3) the obstacles that BIA will face in trying to collect the past due operation and maintenance assessments. GAO did not independently verify the data BIA provided on the project's idle acreage and past due assessments.

GAO noted that: (1) BIA officials estimate that approximately 30,000 acres, or 21 percent of the project's acreage, are currently idle; (2) these lands are out of production for a variety of reasons, including changing farm economics and poor soil conditions; (3) in addition, BIA has not often exercised its authority to grant leases on behalf of Indian landowners who have not leased the lands themselves; (4) in 1996, BIA decided to exercise its authority to grant leases more often and began marketing the idle lands more extensively; (5) over the last decade, uncollected operation and maintenance assessments have accumulated to a total of $7.3 million, excluding interest, penalties, and fees; (6) BIA's practice of deferring the collection of operation and maintenance assessments for idle trust land is the main reason why assessments are past due; (7) deferred collections on idle trust land account for $5.5 million in past due assessments; (8) the remaining $1.8 million in past due assessments consists of delinquent payments from lessees of Indian trust land and from owners of nontrust land; (9) BIA has not aggressively attempted to recover any of the $7.3 million in past due assessments; (10) the biggest obstacle to the collection of past due assessments is BIA's belief that assessments on idle trust land are not justified; (11) moreover, because BIA has not collected past due assessments in a timely manner, federal and state statutes of limitations preclude the agency from using certain methods to collect the older assessments; (12) for example, the federal statute of limitations for using administrative offsets, such as deductions from federal income tax refunds, is 10 years; (13) when BIA has collected past due assessments through land sales, it has not, since August 1991, returned the funds to the project as required by law; (14) instead, it has deposited the funds in special accounts, anticipating that the past due assessments would eventually be cancelled and the funds could then be returned to the landowners; and (15) as of December 1996, the balance in the special accounts was about $103,000.

Recommendations for Executive Action

  1. Status: Closed - Not Implemented

    Comments: In response to this recommendation, the Subcommittee on Interior and Related Agencies, Senate Committee on Appropriations, through language in Senate Report 105-56, pages 53-54, requested that GAO conduct a comprehensive review of BIA's land appraisal process. On June 30, 1999, GAO published the results of that review, "Indian Programs: BIA Should Streamline Its Process for Estimating Land Rental Values" (RCED-99-165). That report contained three recommendations to improve BIA's appraisal process. This recommendation applied only to land appraisals at the Wapato Irrigation Project and is being closed in light of the three comprehensive recommendations in the more recent report.

    Recommendation: To facilitate the leasing of idle trust land, the Secretary of the Interior should direct the Assistant Secretary for Indian Affairs to develop a process that estimates the fair market rental value for the idle land, taking into account the cost of the rehabilitation required to bring the land back into productive use.

    Agency Affected: Department of the Interior

  2. Status: Closed - Implemented

    Comments: A Land Redesignation Committee has been created to review the designation of certain chronically idle tracks of land within the Wapato Irrigation Project. Based on the committee's review, these tracks may be temporarily or permanently removed from the project's assessable acreage. The Committee is still reviewing specific parcels; however, none have been removed yet. The Committee is focusing on getting these parcels leased rather than having them removed from the project. It may be 3 to 5 years before any chronically idle land is removed from the project's assessable acreage.

    Recommendation: To ensure that the costs of operating and maintaining the project are assessed against acreage that is physically capable of producing crops, the Secretary of the Interior should direct the Assistant Secretary for Indian Affairs to remove land that is incapable of producing crops from the project's assessable acreage.

    Agency Affected: Department of the Interior

  3. Status: Closed - Implemented

    Comments: BIA's Yakama Agency Office has closed the special accounts and transferred the funds to the Wapato Irrigation Project. In total, $108,502.42 was returned to the project, and $2,826.29 was refunded to the payees as the debts these funds had been withheld to cover were subsequently paid by lessees.

    Recommendation: The Secretary of the Interior should direct the Assistant Secretary for Indian Affairs to apply the past due assessments collected through land sales to the project as required by law and to liquidate the special accounts.

    Agency Affected: Department of the Interior

 

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